credit rating issue and idea to minimize downgradeing

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upstatei
Posts: 4
Joined: Sat Feb 25, 2012 9:24 pm

credit rating issue and idea to minimize downgradeing

Post by upstatei » Sat Feb 25, 2012 9:58 pm

I have not been late or missed any debt payment in over 20 years. However, my retirement funds are running out leaving me with social security only plus my very small earnings from a part time job. I am age 70 and have substantial unsecured debt. Not a problem until the banking/economic downturn about three years ago when my earnings began sliding and my resources began rapid descent My total bills exceed my social security be abount 400.00 per month. My creditors will not assist although I have faithfully kept current with all(mostly credit card issurers). Two of them say they will not discuss at all unless I go into default. I am in a state that prohobits wage or social security garnishment. I have no assets except a vehicle that is paid for and a raggety ole seldom-running boat.

I am thinking of selecting two of my creditors and simply stop paying them each month so as to speed up the paying off of several smaller accounts and then addressing the two that have the suspended payments. By doing this, I hope to maintain current status on all other debts and have more money each month to pay the smaller balances down and pay off within about 15 months.I am thinking of transfering my boat and vehicle to a family member to get it out of my name and avoid possible lien on each.

I do not see a more favorable step to take. Reducing payments on all accounts would put me in great disfavor with them. My plan would only put me in disfavor with the two selected account. I am sure that it would reflect quite negatively to all creditors but I no longer use any of the accounts.

Please comment or suggest regarding my plan which appears to me to be my only viable option.

Thank you

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damjam
Posts: 942
Joined: Thu Mar 25, 2010 7:46 am

Re: credit rating issue and idea to minimize downgradeing

Post by damjam » Sat Feb 25, 2012 10:40 pm

I'm not an attorney, but to me you sound like a candidate for bankruptcy.
I would consult with a bankruptcy attorney that will be familiar with the laws in your state.
I would also look for a forum that discusses credit repair and bankruptcy issues for more information.
BTW, I believe transferring ownership of your car and boat will be looked upon negatively by the bankruptcy court and by many members of this board.

JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 3:58 pm
Location: Southwest Florida

Re: credit rating issue and idea to minimize downgradeing

Post by JDCPAEsq » Mon Feb 27, 2012 8:24 pm

[quote="upstatei"]I am thinking of transfering my boat and vehicle to a family member to get it out of my name and avoid possible lien on each.[quote]

Don't bother. This is what is known as a fraudulent conveyance and is ineffective against creditors who can still seize the transferred property.
John

Occupier
Posts: 284
Joined: Wed Feb 01, 2012 10:21 pm

Re: credit rating issue and idea to minimize downgradeing

Post by Occupier » Mon Feb 27, 2012 10:21 pm

I am a Bankruptcy lawyer. The consumer bankruptcy law is designed to work for folks like you who have not really made a mistake in life, but are swept up in debt you can't pay anyway. You don't want to do a lot of transfers before filing. I have had clients come in the door who have done that, and my advice is always the same. Get those things back, and come talk to me. I don't know what state your in. State law generally controls what you can take through a bankruptcy and keep. Most likely it's everything you have including the vehicle and boat, i.e. only the debt will go away. You can find a bankruptcy lawyer in your state by going to the referral section of their trade association www.nacba.org If you just don't want to talk to a bankruptcy lawyer, I will tell you how the two bigger creditors, which I assume are credit cards, will act if you don't pay them. About 10 days after you miss the first payment, you will get a polite call, the gist will be "did you forget to pay?" Then after you miss the second payment, you will get another polite call, "did you forget to pay again?" Then about 10 days later, you will get a call that is more earnest, the gist will be that if you don't bring the account current immediately, they will have to turn you over to collections. Basically that means they will walk down the hall, and throw your file in the room where they have the Nazis caged up. Those people will call frequently, and try to terrorize you into paying for 9 months to a year. Only at the end of that period will they offer to settle for less than full payment. They will accept about 30% to 50% of the amount due then in a lump sum payment, otherwise they are going to ship your file to a collections lawyer or write you off completely. If the latter, they pass you off to a collection agency with another set of Nazis. I can tell from what you have written, that you wont have saved up enough to make a lump sum payment. So do you really want to go through the collection experience through to that point? Dave

555
Posts: 4955
Joined: Thu Dec 24, 2009 7:21 am

Re: credit rating issue and idea to minimize downgradeing

Post by 555 » Tue Feb 28, 2012 3:19 am

Why did you separate your situation into two threads like this. What is someone supposed to think when they see one thread and then the other?

Thread 1: how do I simply have my mortgage company add my wife's name
http://www.bogleheads.org/forum/viewtop ... =2&t=91635
upstatei wrote:Please tell me if you think my mortgage company would simply let my wife be added rather than requiring a re-finance or the novation process. It would be my intention to remain on the mortgage in addition to adding her to it.
We are in SC.
Thanks
Thread 2: credit rating issue and idea to minimize downgradeing
http://www.bogleheads.org/forum/viewtop ... =2&t=91504
upstatei wrote:I have not been late or missed any debt payment in over 20 years. However, my retirement funds are running out leaving me with social security only plus my very small earnings from a part time job. I am age 70 and have substantial unsecured debt. Not a problem until the banking/economic downturn about three years ago when my earnings began sliding and my resources began rapid descent My total bills exceed my social security be abount 400.00 per month. My creditors will not assist although I have faithfully kept current with all(mostly credit card issurers). Two of them say they will not discuss at all unless I go into default. I am in a state that prohobits wage or social security garnishment. I have no assets except a vehicle that is paid for and a raggety ole seldom-running boat.

I am thinking of selecting two of my creditors and simply stop paying them each month so as to speed up the paying off of several smaller accounts and then addressing the two that have the suspended payments. By doing this, I hope to maintain current status on all other debts and have more money each month to pay the smaller balances down and pay off within about 15 months.I am thinking of transfering my boat and vehicle to a family member to get it out of my name and avoid possible lien on each.

I do not see a more favorable step to take. Reducing payments on all accounts would put me in great disfavor with them. My plan would only put me in disfavor with the two selected account. I am sure that it would reflect quite negatively to all creditors but I no longer use any of the accounts.

Please comment or suggest regarding my plan which appears to me to be my only viable option.

Thank you

dickenjb
Posts: 2941
Joined: Tue Jan 05, 2010 1:11 pm
Location: Philadelphia PA

Re: credit rating issue and idea to minimize downgradeing

Post by dickenjb » Tue Feb 28, 2012 7:35 am

555 wrote:Why did you separate your situation into two threads like this. What is someone supposed to think when they see one thread and then the other?
Multiple personality disorder but sharing the same Bogleheads login credentials? "Bob" could have found "Bill's" credentials in a desk drawer?

xerty24
Posts: 4827
Joined: Tue May 15, 2007 3:43 pm

Re: credit rating issue and idea to minimize downgradeing

Post by xerty24 » Tue Feb 28, 2012 9:12 am

This is easy - just stop paying them. No one is coming after your car or your boat or your SS. Don't bother with bankruptcy, it's expensive and the statue will run on your debts soon enough if you just don't pay them anything.
No excuses, no regrets.

555
Posts: 4955
Joined: Thu Dec 24, 2009 7:21 am

Re: credit rating issue and idea to minimize downgradeing

Post by 555 » Tue Feb 28, 2012 12:49 pm

xerty24 wrote:This is easy - just stop paying them. No one is coming after your car or your boat or your SS. Don't bother with bankruptcy, it's expensive and the statue will run on your debts soon enough if you just don't pay them anything.
They could come after his house.

upstatei
Posts: 4
Joined: Sat Feb 25, 2012 9:24 pm

Re: credit rating issue and idea to minimize downgradeing

Post by upstatei » Fri Mar 02, 2012 9:06 pm

In SC, They could put a lien on a home but can not attach it

xerty24
Posts: 4827
Joined: Tue May 15, 2007 3:43 pm

Re: credit rating issue and idea to minimize downgradeing

Post by xerty24 » Sat Mar 03, 2012 10:38 am

555 wrote:
xerty24 wrote:This is easy - just stop paying them. No one is coming after your car or your boat or your SS. Don't bother with bankruptcy, it's expensive and the statue will run on your debts soon enough if you just don't pay them anything.
They could come after his house.
What house? OP said his only assets were a car and a boat. If he does own a house, he'd need to look into the homestead laws to see to what extent this might be protected (or not) from creditors.
No excuses, no regrets.

555
Posts: 4955
Joined: Thu Dec 24, 2009 7:21 am

Re: credit rating issue and idea to minimize downgradeing

Post by 555 » Sat Mar 03, 2012 11:28 am

xerty24 wrote:
555 wrote:
xerty24 wrote:This is easy - just stop paying them. No one is coming after your car or your boat or your SS. Don't bother with bankruptcy, it's expensive and the statue will run on your debts soon enough if you just don't pay them anything.
They could come after his house.
What house? OP said his only assets were a car and a boat. If he does own a house, he'd need to look into the homestead laws to see to what extent this might be protected (or not) from creditors.
He has a house in his other thread.
http://www.bogleheads.org/forum/viewtop ... =2&t=91635

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